Please use this identifier to cite or link to this item:
http://hdl.handle.net/123456789/1011

Title:

THE RELATIONSHIP BETWEEN IMPORT AND GDP GROWTH IN ETHIOPIA: An Empirical Analysis

Authors:

SEWASEW, PAWLOS

Advisors:

Dr. Gebrehiwot Ageba

Copyright:

2002

Date Added:

9-May-2008

Publisher:

Addis Ababa University

Abstract:

In this study, the relationship between import and GDP growth, and the contribution of
imported intermediate and capital goods to economic growth during the period 1960/61-
1999/2000 in Ethiopia is studied. Cointegration and error correction mechanisms are used
so as to separate the long run and short run relationship between import and GDP. The
effect of imported intermediate and capital goods on economic growth (measured by real
GDP) is also studied using the same procedure.
The estimated cointegrating vectors using Johansen’s cointegrating approach indicates that
the long run elasticity of imports with respect to real GDP is positive but it is insignificant at
5 percent level of significance. On the other hand, real international reserve is found to affect
imports positively and significantly. However, the short run elasticity of imports with respect
to real GDP is positive and significant. The policy implication of the short run high-income
elasticity of imports is that policies of aggregate demand or stabilization may not improve
the balance of payment position.
The results of the estimation of imported intermediate and capital goods on economic growth
indicate that in the long run imported intermediate goods positively and significantly affect
real GDP. However, in the short run, the change in imported intermediate goods before one
year has a positive and significant effect on the change in current real GDP.

Description:

A THESIS SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES
OF THE ADDIS ABABA UNIVERSITY IN PARTIAL FULFILIMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTERS OF SCIENCE (IN
ECONOMIC POLICY ANALYSIS)